Joining the Uday (Ujjwal Discom Assurance Yojana) scheme can help the Tamil Nadu state government save at least Rs. 22,400 crore over a period of three years, Union Power Minister Piyush Goyal said on Monday. The Centre will not be in a position to yield to the demands of special concessions for joining the scheme that the state has raised, he said.
The scheme aims at bringing ailing power distribution companies (discoms) to a state of operational efficiency, with state governments taking over up to 75 per cent of their respective discoms’ debt and issuing sovereign bonds to pay back the lenders.
At Rs. 68,000 crore, the outstanding debt of the discoms in the case of Tamil Nadu is amongst the highest across states, Mr. Goyal told a select media briefing. “I feel sorry for the people of the state for missing out on these benefits because the state government is yet to come on board…since banks have been told not to fund these losses, the state will have to fund them if it doesn’t join the scheme.”
The conditions that the state has set for joining the scheme include write-off of 50-per cent of the outstanding debt of Rs. 68,000 crore plus special grants from the Centre to cover 30% of it, he said. Tamil Nadu is the only state to have sought concessions.
It’s a mixed bag, as far as the other states go, Mr. Goyal said, with states such as Rajasthan and Haryana doing well. Maharashtra, he said, is in a position to reap benefits of about Rs 1,500 crore after the state cabinet re-approved joining the scheme to avail of its full benefits.
In Rajasthan, back in 2013, the state of the power sector infrastructure and of the discoms was “pitiable”, the minister said, with outstanding debt having swelled to Rs 70,000 crore, on which the annual interest itself works out to Rs 10,000 crore. “This is the legacy Chief Minister Vasundhra Raje Scindia received, though she had left behind losses of Rs 1,500 crore at the end of her previous term.”
Ms. Scindia has taken up the clean-up of the sector in mission-mode, Mr. Goyal said.
Earlier in the day, the Power Minister and Haryana Chief Minister Manohar Lal Khattar, agreed to a funding pattern for upgrading the power grid in Gurgaon city to a smart grid under which the Centre will provide Rs 276 crore as special grant assistance. The state government will match the sum and the remaining cost of the Rs-1,382 crore project will be covered through borrowings.
